I agree, you probably won't see a speed increase. You may be able to do *more* things, but you probably won't do things *faster*. You may be able to open more apps at the same time.
The bigger question is can you do this? The iMac has 2 RAM slots, a "factory slot" and a "user slot". The factory slot is not very easy to get to and I think you'll void your warranty if you crack open the iMac to get to it.
So, where is your 256mb stick? Is it in the factory slot or the user slot? If it is in the factory slot you probably want to leave it alone. If you have 512mb in the factory slot you can purchase a 512mb SODIMM ($119) chip and plug that into the user slot in 10 minutes.
If you have cash to burn you can also pick up a 1gb chip for either slot from
http://www.transintl.com. User slot is $499, factory slot is $219.